Sales and marketing professionals are often referred to as the lifeblood o...Read More
Beware the Contract You Never Signed
Beyond the Ballot Box
Buy, Sell or Hold
Food for Thought
From Concept to Production
On the Job
Seeing is Believing
The College of Hard Knocks
The Right Financing
If the financial markets of Europe don’t collapse…if Iran doesn’t go crazy…if the U.S. stock market doesn’t tank…then Utah’s employment picture will remain among the best in the nation.
Like most states, Utah’s economy is still fragile; but unlike most other states, Utah is currently among the top five for job growth and should remain so—contingent on no big blowups. So prognosticates Mark Knold, senior economist with the Utah Department of Workforce services.
While Utah’s unemployment rate is down to approximately 7 percent, the falling unemployment number doesn’t hold as much credence for Knold as does job growth, which is currently at 2.6 percent.
“We are still below our long-term average of 3.1 percent job growth, but in this overall environment, 2.6 percent is about third best in the country—at least within the top five,” he says. “Considering where the recession hit, the depth of it, and how long it lasted, 2.6 percent is still good. We are gaining momentum. I think we will be able to inch this thing up as we move into 2012—as long as there isn’t a huge collapse in Europe or something else.”
To be sure, the jobs picture is improving across the state, but the recession dug a fairly deep hole. “We are just now starting to fill the dirt back in, so to speak, but it will take several years of good job growth to do that,” Knold says. “We should have good job growth, but our unemployment rate may still end up higher than we want it to be, as we re-employ people that lost jobs in the recessionary slide.”
On the Rebound
If job growth continues as expected, Knold thinks Utah will look like what he calls a rubber ball economy: “The harder you throw the ball down, the faster it bounces back up. It may end up being a bit like that.”
The Utah economy went down hard, indeed. The recession brought massive layoffs to the construction and manufacturing sectors and hit the state’s younger population especially hard. Now certain sectors are bouncing back strongly.
Manufacturing is one such sector. Last November, during a luncheon with Gov. Gary R. Herbert, leaders from 21 of the state’s manufacturing companies told the governor they all planned to increase their hiring within the next six to 12 months. Thomas Bingham, president of the Utah Manufacturers Association, notes that it’s fairly typical in recoveries for manufacturing to lead out in bringing people back to work.
“Most everything you buy that isn’t a service is a manufactured product; 95 percent of Utah exports are manufactured products,” he says.
Still, job growth rates vary greatly among the different manufacturing sectors. Some manufacturers actually grew during the recession and were fairly recession proof, like the state’s medical device manufacturers, while those manufacturers tied to the residential housing market continue to struggle. “Those folks have really had some issues and will continue to until the housing market rights itself,” Bingham says.
Knold adds that job growth in the manufacturing sector is significant to the overall economy because manufacturing in Utah is closely tied to exports, thus pulling outside dollars into Utah. “It is certainly good to see manufacturing get its legs back under it,” he says.
Bingham cautions that, at least within some areas of the manufacturing sector, not all of the jobs that were lost will come back. The reason, he says, is because manufacturers have gotten lean in their approaches and have found ways to do more with less. Further, when more manufacturing jobs do open up, “they won’t just be adding bodies. These are very high-tech, sophisticated manufacturing companies. They will be hiring highly trained workers.”
Rich Thorn, president and CEO of Associated General Contractors of Utah, says jobs within the commercial construction sector are also coming back a bit, but the improvement is nothing to write home about. “We just need to make it through 2012. I think in 2013 we will see some breathing room,” he says. “But at least for the foreseeable future, we are just not going to see the levels of commercial or residential building that we saw four or five years ago. As a result, the industry has had to reshape itself.”
From a geographical perspective, job growth is hotter in some areas of the state than in others. The St. George area, for example, still has high unemployment, with the economy being well below what the area is historically used to. Box Elder County is another area of the state with higher unemployment and a struggling economy.